On the political economy of income redistribution and crime

Ayse Imrohoroglu, Antonio Merlo and Peter Rupert ()

No 7497, Bulletins from University of Minnesota, Economic Development Center

Abstract: In this paper we consider a general equilibrium model where heterogeneous agents specialize either in legitimate market activities or in criminal activities and majority rule determines the share of income redistributed and the expenditures devoted to the apprehension of criminals. We calibrate our model to the U.S. economy in 1990, and we conduct simulation exercises to evaluate the effectiveness of expenditures on police protection and income redistribution at reducing crime. We find that while expenditures on police protection reduce crime, it is possible for the crime rate to increase with redistribution. We also show that economies that adopt relatively more generous redistribution policies may have either higher or lower crime rates than economies with relatively less generous redistribution policies, depending on the characteristics of their wage distribution and on the efficiency of their apprehension technology.

Keywords: Political; Economy (search for similar items in EconPapers)
Pages: 41
Date: 1996
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: On the Political Economy of Income Redistribution and Crime (2000)
Working Paper: On the political economy of income redistribution and crime (1996)
Working Paper: On the political economy of income redistribution and crime (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umedbu:7497

DOI: 10.22004/ag.econ.7497

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